The Most Important Question to Ask Yourself Before Starting A Business

With technology for what it is today anybody with a laptop and internet can start their own business over a weekend. Don’t believe me? Check out this book, it will change your mind.

More and more people are opting for the business owner position instead of the employee position, which I love! A part of me wished I had started sooner. But, I’m also very thankful that I didn’t. Mostly because I didn’t have the answer to this really important question.

What does success look like to me? Seems like a very simple question but the answer can inform many of the decisions that you will make along the way to creating and running your business. How so? Let’s take two different ways of viewing success.

1. A CEO of a startup. 10, 20, maybe even hundreds of employees. Year over year growth. Tesla Model S and an apartment loft in the city. Rich with money. Forbes calls your company the next Unicorn. IPO in the near future.
2. A Founder of lifestyle businesses. Rich with Time. Freedom from the obligation of employees, VCs, or shareholders. Freedom to vacation whenever and wherever you choose, or to work whenever and wherever you choose.

These are two very different ways of viewing success, yet depending on which you choose, will have great impact on decisions on how to create and run your business.

For example, you have to decide.. do you go Bootstrap or Venture Capital?

Let’s say you vision Person 1 as the model of success. For many successful startups, growth is the number one goal in the beginning. DAU. Daily active users. Not always, but this inherently means that revenue is secondary if not important at all. If you are bootstrapping this baby, do you think you could go several years spending your own money to grow this startup? Most people aren’t willing to do that, ( or could even do it if they wanted to ), so venture capital usually becomes the way to go.

What about for Person 2? Bootstrapping seems more like the way to go. Which is fine because huge growth isn’t necessary for their business to succeed. Revenue is the more important aspect here. A slow and steady stream of customers and revenue can grow the business slowly.

50% of businesses fail within their first year. It’s a fact. Failure is inevitable.. for everyone. Not everyone gets it right every time. Which is why the Silicon Valley saying “fail fast, fail often” rings true. With that in mind, now you have to decide:

Design, build, market, and perfect one product/service for the next few years? Or design your business to have multiple products/services?

Person 1 may not even get a choice here. If the VC has backed a particular idea, you gotta ride that idea till you succeed or die trying. Sure you can pivot, but pivoting means spinning on one foot. It has to have some resemblance, or utilize some aspect of what you were already trying to do. You can’t run with any idea under the sun, even some of the the real potentials you have hidden in your back pocket.

For Person 2, you may also not have much of a choice here. Slow growth is great… but it’s slow. You can speed up or increase the revenue by having multiple sources of income. $900 of monthly recurring income may not seem like a whole lot for a single product or service you built, but if you build just five of similar caliber, you’ve got a nice $4500 of monthly income. Plus you can afford to make mistakes on any product/service you create because you’re betting that on the whole you’ll have a few winners.

These are just a few examples of how answering “What does success look like to me”, has helped me inform my decision making on how I want to create and build my business. How has it helped you?

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